On January 11, low-cost carriers Allegiant Air and Sun Country Airlines jointly announced their $1.5 billion merger.

Allegiant is acquiring Sun Country in a “cash and stock transaction” that includes taking on $0.4 billion, or $400 million, of Sun Country’s net debt. A press release disclosed that the boards of both airlines have approved the merger. To move forward, the carriers await federal and regulatory clearance, as well as shareholder agreement. Allegiant and Sun Country say they expect the deal to close during the second half of this year.

Once merged, the company will be headquartered in Las Vegas, where Allegiant is already based. That said, the duo plans to maintain a “significant presence” in the Minneapolis–St. Paul area, which is Sun Country’s home.

Allegiant and Sun Country anticipate generating $140 million in annual synergies within three years of merging.

What Else Is There To Know About Allegiant Air And Sun Country Merging?

The press release highlighted the immense breadth of the combined airline, serving 22 million annual customers, nearly 175 cities, and having more than 650 routes and 195 aircraft. Destinations within the combined network would include locations throughout the United States, Canada, Mexico, Central America, and the Caribbean.

The joint statement and the airlines’ leaders emphasized that the merger will greatly benefit consumers and the companies’ operations. Promises include a more rewarding loyalty program and a diversified fleet and network for flyers to enjoy. On the business side, employees may have more opportunities. Also, the two carriers, which claim to be profitable, believe the merger will ultimately enhance financial returns.

“This combination is an exciting next chapter in Allegiant and Sun Country’s shared mission in providing affordable, reliable, and convenient service from underserved communities to premier leisure destinations,” said Allegiant CEO Gregory C. Anderson. “Together, our complementary networks will expand our reach to more vacation destinations, including international locations. With our combined strengths — including operational excellence, consistent profitability, strong balance sheets, and fleet ownership — we will create an even more resilient and agile airline that delivers greater value to travelers, partners, team members, shareholders, and the communities we serve,” he added in part.

Sun Country President and CEO Jude Bricker noted within her statement, “Today marks an exciting next step in our history as we join Allegiant to create one of the leading leisure travel companies in the U.S. We are two customer-centric organizations, deeply committed to delivering affordable travel experiences without compromising on quality.”